Germany’s Franz Urges No Tax Cuts, Low Wage Demands, WiWo Says

By Jana Randow -
Jul 2, 2011

Wolfgang Franz, head of German
Chancellor Angela Merkel’s council of economic advisers, said
the government shouldn’t cut taxes and urged labor unions to
keep wage increases moderate, WirtschaftsWoche reported, citing
an interview.

“Budget consolidation must have absolute priority,” Franz
was quoted as saying. “Germany is facing several additional
expenses as a result of the energy turnaround and potentially of
a rescue of ailing euro countries.”

While productivity gains and inflation would allow wage
increases of 2 percent this year and 2.5 percent in 2012, labor
unions and employers should keep pay increases lower, Franz
said, according to the magazine.